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tv   Squawk on the Street  CNBC  May 30, 2012 9:00am-12:00pm EDT

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isn't upheld, i think the whole bill gets gutted and we have to start at ground zero. >> it's june 1st, a monday that we'll find out. >> i appreciate you being here. make sure you join us tomorrow, "squawk on the street" begins right now. ♪ >> there to celebrate the birthday of ce-lo green. happ happy birthday. jim cramer and david live from the new york stock exchange. we are looking at a loss here at the open. the dow looking to lose about 93 points. meantime, let's look at europe. a lot of concern with the banking sector. a lot of concerns about the rescue fun for the euro zone bavr banks weighing germany down.
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>> apple's tim cook gave his first sit down at the d-10 conference last night. among the highlights, apple is intensely interested in tv. siri will get better and the company's doubling down on secrecy. >> multi-year lows this morning after posting a loss and hiring an srbc to exemployer options. is rimm going the way of the trade? >> facebook is more than any dow component, or nasdaq component. meantime, mark zuckerberg is falling off the list of the wealthiest americans. >> calling for a euro zone banking union from a rescue fund to recap banks. talk intensifying about spain becoming the first to exit the euro zone. amazing. >> first up, last night, all the conference in california, the ipad and iphone maker is about to announce some incredible new
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products. at the event, he was asked about apple's foray into television technology. >> this is an area of intense interest for us. all of my movies, everything is come i coming throughout. so people -- the customer with that product is incredible. it's off the charts. and so we're going to keep pulling this string and see where it takes us. >> interesting to compare what his personality will be as opposed to steve jobs who, as he said, marked the saddest day of his life. >> this guy has been dealt a great hand. i've never seen a company as dominant as this company in my whole life. even microsoft and zenith just doesn't compare.
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facebook, a case to be made for other tech companies. this company is incredible. >> wow. >> interesting hearing from him. just simply hearing from him f starting to get accustomed to sort of him being the leader. you know, you still think of jobs somehow standing there behind him. but, of course, that's not the case and hasn't been that for a bit of time. tv, man. you know, we'll see. we've been hearing about the rumors for so long. the question is when do we see the real first evidence of a key move there. >> hyper jeffreys beginning trial production of the tv. and cook himself saying that we're going to see how far this string brings us, the string of tv. and it's interesting to hear him talk about possible acquisitions. not looking for a large acquisition at this time, but leaving open that possibility of using some of its cash in that way in addition to the dividend it started paying this year. >> i want the product. that was my first thing. i want the product. i'm going to say put on "mad money."
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or put on "madmen." obviously, what he's saying is siri is a larger role. we are going to be in that jetson era where they figured out how i don't need two remotes and i don't get frustrated every day with my tv. i want this and i want it now. i don't want any other product. i want this one. >> at what price, though, would you pay for that product? that is the thing. if you have a tv now that you can get, it's a commodity product, as we all know. are you willing to pay triple or quadruple the price of your average, flat screen tv in order to -- >> you can ask the question about phones five or six years ago. >> here's what i think happens. i think it's subsidized by other companies. i think that they're brilliant. i think they'll find someone else to pay. costco has a 70 incher at $2,000. i think apple does two things. one -- hey, i like to browse. one of the things we've learned about apple is whatever price we think we're going to pay, we end
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up paying less. and the other thing is that they're so in charge that i am confident that someone is going to give me a deal on this thing that makes it so i would never think of it again. >> the deal would be your broad band provider, i would assume, ala the wireless model. so it would be a comcast or a time warner. i can't imagine they would do that, although it would increase your broad band usage significantly, i would machblg. by the way, all the tvs now are wifi enabled. >> i envisioned this world where verizon and at&t fight for my business and subsidize the iphone to where it doesn't cost musz. >> when that number exceeded their capital expenditures for the year, we started to see where they lie.
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we know that somebody is going to subsidize an apple tv. but you never know. >> okay. so apple is the never-know company. >> if you could just tell me that i could talk into something and get whatever i want. >> by remote control. >> i was in a jam yesterday. i was trying to figure out whether to watch sunday nights, the killing, a very key episode. we're getting near the end. on itunes or on amazon? how about i just say to my tv, "put on sunday's killing." >> don't watch that show. >> yeah, exactly. >> it never really ends. >> you mentioned the jetson's. what was the jetson's maid's name? rosey? >> yes. sort of an echo of that.
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>> the other guys will look a lot like the flintstones if they come out with this product. bam, bam. >> all right, let's talk about research in motion. certainly under pressure in the free market trade. the struggling blackberry maker says it expects to report a third quarter loss and announce significant loss ahead. jp morgan to evaluate very specific options. i know, david, you love to go through these releases. what was specific about this release? >> they don't have nothing cooking. >> the sale? >> the ship may have sailed. >> see this? talk to the hand. talk to the palm. where's the camera here. i'll give you two palms. >> you're talking about a company, apple is now valued at a hundred times what rimm is valued at.
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>> how about oppenheimer could announce measures to save cash. take out discussion could pop out. it's too risky to short. >> it does have a huge number. you reckon there's a short of this and then someone bottom fishes. >> there's a belief that there's real value there. >> but they are the pep boys of -- >> is it over, though, in terms of a fundamental growth or even operating story? is it no longer -- >> it hasn't been a growth story in ages. in agens. >> and then what happens is, remember, the first loss is your best loss in trading. the first is your multiple losses in business. >> $2 billion in cash. practically no debt. would you take a fly? >> apple is going to be down really big today because of spain. i'd rather take a fly on apple. >> how often do we say that? >> when you x out cash, the
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market value is $3.5 billion. >> what, rimm? >> yeah. >> well, you know, fill it to the brim with rimm. let's understand. this is a story where bernstein comes out today and says is that the next generation of the blackberry is a disaster. now, let's compare this for a second. i don't know what the itv looks like, but i want it. i've already got research firms telling me that the next blackberry is a disaster. >> and they deliver every time. how many times did we hear that the torch was just going to be the next great phone. and it wasn't. who has one? no one. >> i saw one -- i saw someone this weekend with a windows phone. i'm not kidding.
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the windows phone that i saw is steve balmer at my reunion. he had a windows phone. it was. it looked really cool. i was thinking to get one of those. >> no zoom, i assume, right? >> no, windows 8, it's like fabulous. it is. it's fabulous. and i think microsoft is a go-to stock here. it's been acting really well. it's a great balance sheet and a big product cycle. and in the meantime, i'm not kidding, the windows phone was cool. >> meantime, after sliding another 9.6% yesterday, social networking companies now down more than 24% from its ipo price, has lost $25 billion in market cap. also, facebook has received a second request for instagram meaning that a review of
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antitrust regulators may be length thi. all of this continues as mark zuckerberg's honeymoon in rome goes on. one case how he allegedly stiffed a waiter out of a tich. they cannot win. the past 10 days have been tough. >> yeah, it may still be a little early there. if facebook offers dividend, i'm getting real interested. there are now multiple articles that gm is not alone, that there were many who put a lot of money and work in facebook and it turns out that they didn't get the results. there was a terrific analyst on this morning on "squawk" who was saying, look, i still don't know what was said in that call where the buyers, obviously, pulled back and the sellers stepped up. this is the fabled morgan stanley call. >> i don't know about that whole
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idea of the call. so much of that was discussed here. everything that was here was in the s-1. what do you think here? >> that may was real awful. >> to what extent was this stock trading on? what their first quarter as a public company is going to show? >> just, i don't know. i think it's trading on the general market. i think it's trading on the revulsion of stocks. i think it's trading on the idea that this has become ground zero of the nuclear war against stocks by the public. >> ground zero of the nuclear war against stocks. okay. not to put a fighter point on it. >> i did not say h bomb. i'm using a bomb. i'm not talking thermonuclear, i'm talking precision bombing. but this stock has become -- this is -- this is it. this is the stock that has made it so if there are any americans left who still wanted to buy something that is nondividend.
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enough. they can't take it anymore. >> the next couple of tests for the stock, the quarter, the lock-up expiration. we saw what's happened with the lock-up expirations. we had zynga expire on the 28th. and the number of shares have increased dramatically. groupon is on the 1st. that's this friday. and the number of shares are going to double. >> facebook's expiration, you'll have insiders of the company who have a cost basis that is virtually nil, that may be regardless of whether it was 28, 38 or 58. they may want to sell. and then you have people in that secondary market who bought stock at 28, 29, 30 over the last year who are not going to sell. so it will be interesting to see as we sort of approach that 91-day mark. but we'll get the quarter before then. and we might even get a couple of quarters before 180 day lock. >> mark pincas beat me last
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week. he's clearly beating me in life because zynga is still a $4.4 billion market cap company. i play -- you know, i went -- >> that's how you measure life? just based on the market cap of that company? give yourself some credit. >> i have a 353 in the next round and the first round scramble of friends. >> so it's not the money. it's the words with friends points. >> exactly. >> may i just say i think it could still be too early to buy zynga. like it was too early to buy pets.com. e-toys turned out just to be way too early. first tuesday, they changed their name to first monday. it was too early. >> the implication of that, jim, is that zynga is going to go by the way of all of these stort
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of -- is that what you mean? >> i think zynga -- look, zynga has got some good games. i liebke to play them. >> you don't think there's a business model in selling animals? >> it could very well be a billion dollar market cap company. just right now, it's a 4.3 -- >> play a zynga game on mobile, you are forced to look at an app. >> last night, for a moment, i almost had to buy a coin. i came this close to buying a coin. >> or pink colors to draw something, right? >> i refuse to pay for those pink colors. and i -- look, i am not a good drawer. >> there's a division here on the set. the two of us are like what? >> you get a gold coin for inspiration. hey, listen. this is the new world. i don't pay for anything and i have a huge amount of enjoyment, unless it's apple. and in that case, verizon pays for it! that's very true. meantime, we've got to talk about europe.
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worries about europe setting u.s. futures lower here. spanish bond closer to november highs. the european central bank is trying to sue pierce about spain saying it has recapped trouble lender bankia. a lot of interesting movements in the european markets this morning. >> it's so -- the torn of headlines that aren't real headlines continues. what is real, what isn't. >> right. >> which then, sometimes, lends us not to focus on when we get real action, like the ltro which we all knew about but didn't appreciate how significant it would be at the end of last year. that being said, the managers of money that i speak to are pulling back, given what's going on in europe. they are simply saying i can't figure it out. i don't know. but i know it's still of importance. i don't want it to be any longer, but it is. therefore, i'm bringing my nets down, my net exposure. >> now, i've been good this
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morning about the black comedy that is a lot of these tech stocks. but there's nothing funny about spain. it's obviously way too big. they have a houszing bubble. they have unemployment that's off the charts. >> retail sales are miserable. >> just amazing. >> two years at 511. >> and it just reminds you that yesterday was one of the phony days in the market. it was just a totally phony day. sec doesn't care. what's the sec looking at? not quite clear. but, again, i mean, this is -- this is a very odd time. and, yes, i use a nuclear war just to be able to say, look, the public has had it. and who can blame the public. >> right. >> i heard this morning, italian credit spiking. i said hey, do you think jp morgan has a position? have they written insurance? and then i said do you think jamie dimon knows if they have a
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position? >> that's a question you never would have asked three months ago. the silver is an 88 handle. that is the lowest since october. >> and retail, american retail, is at a 52-week high. >> we'll talk some brighter points and some other upwardly lifting stories. when we come back, you'll hear the former ceo of paypal and the former coo of yahoo. one more look at futures. pretty strong reversal from yesterday's action. looking at a triple digit loss at the open. a lot more "squawk on the street" live at the nyse when we return. ttd#: 1-800-345-2550
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research in motion announcing it is higher to help the company evaluate strategic options. a first quarter loss is going to
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have to pay a lot for that advice. that brings us to this morning's squawk on the tweet. what advice would you give research in motion? let us know at cnbcsquawkst. maybe make the phone that people want? >> i think put yourself up for sale already. they did everything else. but they could probably -- it's still worth something. >> it's a canadian champion. they can't sell it. >> did you just make an illusion to a company that went bankrupt? [ laughter ] >> sorry. >> coming up next, cramer's mad dash. find out what stock he'll talk about and whether or not it's one to run. >> breaking news, take a look at futures here as we're observing the euro getting closer to a two-year low.
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a few minutes to the bell, here's jim with a mad dash. looked at linkedn, takes it to a buy. >> here's the problem with all of these stocks. they have a hundred percent revenue groowth for eight straight quarters. yes, it is unbelievable. and i'm not being facetious. but what do you do?
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how can you not own a company with a hundred percent revenue growth? the answer is it's still too risky. >> yeah, it's down 20% from those levels. they said here's your pull back. finally, a split decision on win. >> wow, i've got to tell you. goldman wants to pull the bottom in win. at the same time, i come back and say china really not a great place to invest. and is that not mccal. but this stop is outrageous. >> all right. sharp down at the open. we've got all the action covered, including the opening bell. just moments away here on "squawk on the street." stay tuned.
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it could be a very sharp downturn here. there's the bell. here at the big board. pharmaceutical celebrating a transfer to the new york stock exchange from the nasdaq. the provider of research cons t consulting communication services. interesting the transfers from the nasdaq to the new york stock exchange when the nasdaq after the facebook debacle. they said look, we're in good shape. >> it is kind of a muhammad ali situation. >> people forget how successful it's been as a company. skbl both generic and proprietary. the proprietary has been -- is always about to be under assault. but it is a great company. >> this is a new record-low for the ten-year.
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>> incredible. >> earlier, the new record low was 167. here we are below that, 1659. and also, we should mention, the 30 year is at its lowest since october. so all of it are at levels that are just unbelievable. >> that just takes my breath away. i just -- you know, you came into this year, you came into the year prior to that thinking okay, this thing has got to start -- the yield has got to start to go up and up significantly. and here we are. >> now, i think there's a really interesting trade here. and it's not what people want to hear, except for bernanke. you can get -- if you're a qualified buyer, it is not hard to get a 3.4, 3.5 mortgage. this is kind of like when my dad came back from world war ii with
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a g.i. bill. you're kind of nuts not to buy real estate because it's visible. >> so once in a generation. >> once in a generation. maybe even beyond that. in terms of how things are heating up, we're seeing tremendous weakness in the financials this morning. big losses on the parts of morgan stanley down 2.5%. citi is down. energy stocks weak in the session with oil down to 88.81 right now. this is the first time it's hit the 88 level since october. the problem here with oil, you would think that the oil companies would still be able to make money. we're not seeing any sort of help when oil trades a little bit higher to the energy stocks. >> a little bit of a move yesterday. goldman was saying by the independents. two things were happening in the oil market.
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don't forget, brent is at 104. and gasoline hasn't come down in a lot of parts of the country because of refinery capacity. as much as i do like the las vegas, immediately, people e-mail me and say gasoline is almost the exact same price. this lower wti has not benefitted the west coast. >> at your point, they may be lower than they were the year previous, which does not happen very often. >> facebook new low, 28.25. >> and i still think that people, after you get the european downdraft and look at target. they take a look at target. very interesting article talking about how it hasn't been such an underperformer.
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they are a giant consumer of grains. i mention this only because they're not that international and you come back and you say after they trash our markets, off the futures, people come back and pick at the stocks that are american. it's been a trade. it's worked. it isn't something i would encourage aggressively because we got over-bought again. yesterday was a phony rally. but there are values that just -- you have to let the market bring them down. >> yeah, retail really weak today. kohl's is down by 5%. that's an area to watch. >> yeah, look at that. >> we should point out rem shares not unexpected, still trading about $10 a share.
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>> i know rimm has a good balance sheet. but the issue with rimm is there are still going to be people who say rbc is going to say just sell the darn thing before it goes even lower and bring out some shareholder value. david, the pressure to they will this company must be mounting to someone, someone at that company. >> to melissa's point earlier, it's something other than a changing control. >> it's like chesapeake. there are people periodically that come on air and say that they own some rimm and they're going to saber rattle. but canada is a protected country. glp it can be. can you really argue that rimm is a canadian champion?
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and the possibility of layoffs and things of that nature, if it were not to reverse this seemingly inevitable slide. talking about inevitable slides, let's move onto europe. we did want to talk about europe as well here and put it in some perspective. it is the single most infl influential component of our down so far. when i talk to people who invest here and abroad, there is still great concern -- not about greece, although there is some front and center, but mainly about spain. now, is it happening at the big spanish banks? no, from what i'm picking up, it is the smaller spanish banks that you may want to keep an eye on. they're getting deposits, jim, from what i hear. smaller banks may be losing them in spain. but then you also may have those
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losing the money out of the spanish banks entirely. where do they move them? well, into the swiss frank. we've seen what's gone on lately and it's worth taking another look versus the euro. the swiss try to defend that 120, that 120 area. man, they're having to spend a lot to do that. that is what is happening here. now, when you look at the deposit flows, when you look at greece for april and then you look at spain for april, you won't see anything that's that alarming. but let's see what may looks like. you've got to know what these numbers look like, as well. from what i hear, again, this is a real concern. continues to be one. and will we get that firewall from the ecb? we will see what happens pra people need to prior to those elections where we could see them exit and all of this could become very rapid in its -- >> david, throughout this period, there's been an unreal nature of the housing crisis.
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there's too many homes. no one talks about how to deal with that part of the crisis. they just talk about how to sure up the banks and that has been a losing strategy. i know how big they are. maybe they need to be confident. >> maybe. but then you're asking where does money come from? but then you're talking about different countries. we talk about how the germans spend enormous amounts of money to bring back east germany. but that still was germany. it's a different construct to ask them to say the same thing about greece or spain or italy. they don't speak the same language. >> we're surrounded by some mad professors down here. >> you want to know what branding looks like. it's really a pharmaceutical company well-known here. and they're doing something today.
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peter, you look like the mad professor today. >> i am the mad professor. >> congratulations, guys. everybody is wearing these mad scientist lab coats. i am so glad i came back for this. let's call it the euro summer part ii? new highs in the dollar index. we're here for a low in the year and copper disappointing. yields on the spanish tenure at 6.7%. two things strike my eye. number one, did you see the greek polls here? which poll do you want? there's a poll out that says the pro-bail out forces are winning. and then there's another poll out that says the anti-bail-out forces are winning. so whatever poll you want, you can have it. >> one can be ahead and still
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not be able to form a coalition. >> the hope is the party will be denied a governing majority. there's an extra little push they can get if they win a majority. that's not going to happen. so the debate is whether or not that will happen right now. so pick your poll. number two, there's a big comment out from the european commission, which is the executive arm. this is the last topic allowing to directly recapitalize banks. the problem is, there is no treaty mechanism to do this. it is not allowed under the current treaty and the germans are opposed to it. >> and some others. >> why restructure your banks
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when we can just get more money. it's a moral hazard and it makes some sense. this european bank union is a very hot topic because there is a lot of talk about a euro zone deposit insurance fund. how do you stop people taking money out of banks in greece and putting them in germany? how do you stop people from taking money out of spanish banks? euro-wide deposit fund would essentially make everybody, no matter where you are, you're guaranteed, it doesn't matter what country that you're in. the problem is, you, again, have to require some kind of treaty. all the european countries have their own funds. but you'd have to require another treaty. and the bottom line here, i think the important thing is, they're going to try to do that. even if they just come out and say that, endorse it as a group, i think that would help calm some of the markets. >> yeah, things did move. >> that's right. the euro moved just up on that
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comment saying that we ought to go towards a more direct bank union. and that would mean some kind of deposit insurance fund. >> guys, back to you. >> i think the euro, they have to break it up. you don't want to go bottom fishing in spain. i've got a guy trying to buy property in greece. says it's not cheap. they've got to break up the currency to get off bottom. >> hey, this sd a big moment in history. let's pull out the boom chart. reaching 130. yes, that's a 129 yield print. so let's celebrate. interest rates being low. the central bankers have been in ministry since '07. is it working? i don't know, but give me more.
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it must be working, right? we must be better off today than we were yesterday than we were a month ago. the problem is, we're not. as we continue to pay for excess reserves and companies that we loaded up and dispersed to the general public. of course, we don't have an auction this week, one of the rare weeks we don't. with these really lower rates, i am sure we're going to see a boat load more of programs for principle forgiveness because interest rates are working so well. i know so many people refiing left and right that really need to. >> rick's got the bolts to the country there. all right. let's check out the latest energy and metals. obviously, these things are not working out today. >> good morning, jim. right here, we're seeing all the commodities really get weaker as we see that euro continue to slide. crude oil sliding more than 2% today.
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we went below 90 and then below 89. that's a more than 2% drop. that means crude is down 15% for the month. that's the biggest slide since september, 2008. it's working against crude oil and worries about what's going on in europe. it's continuing today. >> courtney reagan, thanks very much. let's take a look at the chart and see where we are as we've had pretty much one percent declines across the board. and we're seeing the u.s. dollar approach to a two-year low. the dow is down by about one full percentage point here. >> also, a great statistic here. 278 s&p companies yield more than the 10-year.
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56% of the s&p yields more than the 10-year. >> and why does tim geithner not solve any liquidity problems that we could have in the future? >> you've been asking for this forever. >> he would say we are, we are. that's what he always says to you. >> i'm talking about $500 billion to ensure that we will not be greece. we will not be spain. does anyone think that they're not going to come after us after this thing with our budget deficit? >> look, i think we are next. we have an option. we have options. we have a political situation that can be changed if there's
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le intran jens. look, you know i'm pro-geithner, i am. argentina was a capitalist country for a while. i'm being told that there are subtle controls being put on for every country that deals with argentina. india this morning. horrendous about investing in india. chinese, now, i understand that the political turmoil there, some people were saying we need more state government companies. others say less. hey, look, romney versus obama. it's not about whether we should have a revolution. >> research emotion, we should note down about 10.5% defending the $10 mark hiring banks as a blackberry report with a loss. so we ask you, what free advice would you give to rimm? we'd love to hear from you.
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much more "squawk on the streets' straight ahead.
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take a look at the dow now with the dow jones industrial down by 1% and the nasdaq down by more than 1% at this hour. jim, across the board, we're seeing weakness. there's not a huge differentiation between the sectors. we should note that facebook is higher. as much as we say it's lower, it's up by more than 1.67%. >> do you think that a lot of people maybe put too much buying and you're seeing a reaction to that? >> or you're now more willing to take because you can buy insurance. >> look, the stocks come down. david, during the break, you reminded us, it is a real company. it does have profit. it -- linkedn, the call today has got some traction. i'm not recommending these. i'm just pointing out that there
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is an anomaly here. >> it has tended to trade inverse to the broader market. important to point out the safe havens continue to be the safe havens, even on these hideous days. there's some positive news about some cancer drugs. i mean, these companies are not that expensive with good yield. that does seem to be a ticket to be able to ride out this storm. >> a lot more "squawk on the street" is still ahead. [ male announcer ] this is the at&t network.
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what's coming up at 10:00?
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>> i'm glad you asked me that. he almost bought facebook for a billion. how do you make money out of what tim cook said? that's an important for one shareholders. also, rimm? what do you do? too early to sell, too early to buy. meantime, six in 60. six stocks in 60 seconds, give or take a few. >> the moment that someone says something about visa in the street, it just comes and je jeffrey says don't worry, it's fabulous. . it's hard to kill. >> a record bye in web bush. >> believe it or not, we've got some great numbers. foot locker, finish line, the whole group. >> jeffrey says it's going to lower guy kans.
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>> new mining, sternagie says it's a buy. >> oh, please, they're doing terribly. >> seeds forever positive. we need corn. >> it's not so good. >> yeah, my question is what strategy? some good ads, though. i like the ads i invented. they're the -- let's just say that they're brick and mortar. >> yes, what's coming up on "mad money"? >> we have b&g foods because people are still buying pickles. they also do a lot of pollen and jams. listen, cream of wheat, you know, they store cream of wheat in hardened bunkers, if it ever happens. >> interesting. heinz did bring down some long term growth targets last week.
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>> international. yeah. you want to be in domestic. this guy is totally doe mesic. >> jaim cramer, when we come back, we'll get some concerns on home sales. and then that d-10 conference, should it convince you to buy the stock? keep it right here. one golden crown. come on frank how long have we known each other? go to e-trade. they got killer tools man. they'll help you nail a retirement plan that's fierce. two golden crowns. you realize the odds of winning are the same as being mauled by a polar bear and a regular bear in the same day? frank! oh wow, you didn't win? i wanna show you something... it's my shocked face.
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welcome back to "squawk on the street." pending home sales fell well below expectations. pending still up 14.4% from a year ago. remember, this index from the national association of realtors is based on signed contracts, not closings. contract cancellations have been running historically very high of late due to appraisal and credit issues. march's reading was revised down as well. existing home sales in april rose 3.4%.
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inventors are still very low. they're revising their forecast up to 4.8 million sales. >> gets to the road map for the next hour. facebook watch continues. as you know, it punctured $30 yesterday. we'll talk facebook from all angles with the ceo of chegg and the former ceo of paypal. >> anounszed it will higher bankers to weigh its options. why are analysts saying now is the time to weigh in. >> plus, tim cook speaking candidly. and should you buy into the apple ecosystem? >> of course, tracking the market sell off from europe to the big euro. the s&p down now right now lows. >> yeah, down 147 points. let's get over for a market flash.
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>> yes let's remember january agreed to buy out the group. that was $791 million. but now gores is pulling out of this. the stock down to about 8.79. gores saying basically your first quarter earnings, rather, were not strong enough and that is a material debt rim. . >> facebook getting a bit of a boost this morning after falling, as you probably know, 9% yesterday. facebook was almost acquired by yahoo for a billion. dan is the ceo of chegg and the former coo of yahoo. he joins us this morning here always good to see you here. welcome back. >> man, a lot has happened with the stock since then.
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is it turning out the way you visioned? or is it reaching a level of surprise for you? >> i'm surprised at how poorly the system worked. it's one of the biggest ipos that the valley has ever seen. linkedn was so much smaller in terms of the size. a lot of things didn't go the way people thought. but the company is still performing. users are continuing to grow. it's got billions of dollars of revenue. people don't realize it has less than 4,000 employees serving a billion people. so in terms of its kwcapabilityi think it's in tact. >> in the valley, how is it seen? do start-ups feel they now have less to work with than they did prior to two fridays ago? >> you know, i don't think it's deemed as a failure. it went public at a hundred billion.
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in terms of what the companies are thinking out in silicon valley, it's its own place. there's billions of dollars in private investment capital. valuations haven't changed. at the moment, i think people are waiting for this to pass. it's been a week and a half. >> does this change valuations of these start-up companies? i mean, facebook existed for a very long time. and the argument can be made when the growth trajectory was steeper, there may have been a deferent outcome. >> it's most ly psychology at te time. so i think you just have to pick the moment and the window. >> dan, an area you know a lot about having been at yahoo, of course, is advertising, display advertising, whatever it may be, particularly in mobile.
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that seems to be an area where a lot of investors pause because they're worried about the trajectory. what are you worried about as everything moves to mobile? >> yeah, that's a great question and it's an unknown. there is a shift in terms of the platform. and so every time there's a platform shift, the best companies always axccelerate their growth. you've seen that a little bit. in this case, it's not like people aren't using their tablets. the question is who will make the shift? >> can i just pick up a side issue on that? last night, tim cook said the people should stay tuned on whether people would have a partnership with facebook in the future. from what you know of zuckerb g
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zuckerberg, what does tim cook bring to the party and how strong could it be? could they integrate in some form? >> i think probably the most used application on the iphone is facebook. i think it's being used already. so the question will they can integrate more or build businesses together, it's hard to know. >> i'm asking you slightly more. what would zuckerberg make of the fact that his stock has lost $25 billion. might he say further down the line, actually, you know what, let's just go in a strategic partnership with somebody else. apple has enough cash to buy facebook out. >> my guess is no. facebook, although it's 8 years
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old, necting one out of every two people in the world. i think they'll just continue to execute with mark and cheryl. they'll have a great bench underneath them. i think they'll just stay focused. >> are you seeing the trajectory change? we're sitting here obsessed with euro and focusing on companies that have little exposure to outside the u.s. are you worried? >> well, what we do right now is we're giving the largest connected network for students. we dpet them veget them very ch. right now, we don't see any effect of europe. but i think that growth companies aren't really affected by what's going on in the rest of the world right now.
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the market right now is so big and it's emerging. i think over time, they will suffer for periods of time, but not forever. >> does that impact the future? >> i think it's just a reflection of the effect we've had on the market. we are now probably the largest textbook -- we are certainly the largest textbook renter. and i think bookstores are becoming more relevant. and i think that partnership is more about the nook. it's the third largest tablet. and i think it's about microsoft, their operating system and the chance to compete more with amazon and apple. >> dans, thanks for coming in. >> sticking with the facebook story, tech portfolio manager who's been telling her clients to stay away from facebook.
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the total return fund, great to have you with us. now, we should be clear that you said to stay away from facebook mainly because the company hasn't been in existence long enough. is it an intriguing company? based on the number of users they have? the walk on their industry they have? >> right. i think for right now it is. there's a couple of cautionary notes that i have. i guess my biggest problem, whenever i read the s-1 of facebook, is that i got to page 1.5 before i ran into how they actually make money. they're writing about the business and they're saying they connect people and the great experiences and oh, here's how we make our money.
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looking at the google s-1, in paragraph 1, sentence 2, it says we're here to make a great search, but also a great advertising plat tomorrow. and i think for me, that really sealed the deal where it says please don't buy facebook even if you can get the shares to our clients. in the long run, we want companies who make money. and it seems like facebook is not so focused on that. >> we are more risk adverse so we go towards companies that participate in business technology. believe it or not, we think microsoft is a company that's focused on providing a good experience for its business users probablyuser more than it consumer users. sbel is at the root of just
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about every server out there. so we're really focused on that business-oriented tech buyer. >> one of your main fears for facebook is you don't believe they understand who the customers are. and the customers are the advertisers. now, at some point, you can imagine, just because it's a new company that it hires a few extra people and could change the focus quite fundamentally. i wonder if that happened, would you suddenly view it as a buy? >> well, it would depend on how much money they could make and whether or not that could disenfranchise their base. so a lot of people praelly love facebook because they're not intrusive with respect to advertising. so facebook has to tread very, very carefully whenever it's
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trying to ramp up its revenue model. it's not to offend those 800 or 900 million people using it. it's a really hard walk. again, like google, although we don't own google, they understand that we thought that advertising was going to be their mechanism of revenue. >> kim, finally, pepsi signing a year-long deal with twitter. i wonder if you think we are beginning to see baby steps or even larger steps of large, integrated marketers making that leap into social. that's got to be net positive? >> i think that it is. but at the end of the day, they want metrics. and i think you have to build into your platform a way to understand the whole marketing
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cycle. how much relationship do you have with these end users? and you have to have metrics to be able to continue to spend those advertising dollars. that's what we're looking for to get most of their revenues from advertisers. you have to sats fie that group. >> kim, great to speak with you. thanks for your tumt. >> thank you. >> that more than wiepes out al of the gains from yesterday. that was the 8th biggest gain of the year and it's gone. when we come back, warning late last night of a fourth quarter loss, disclosing that it has hired jp morgan to a strategic view of its business. is this the last leg? and is there any hope left to turn the ship around? we've got the analyst who just upgraded the company in a moment. moment. ♪ ♪
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i want to draw your attention to the steel sector. really causing a lot of bearish sentiment and credit downgrades for some of those european steal makers for ak steal down 2.5%. beter than 3.5%. simon? >> thank you very much.
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also on the downside today, arguably getting taken to the wood shed. so why is one analyst upgrading the shares? let's go straight to the source and bring in alex who is a senior analyst at jmp securities. i guess we should mention here, al lex, it's not so much of a downgrade that the stocks lost three kwaurters ofwaur its mark cap in just a year! that's right. we went from a sell rating to a neutral. the stock is now hovering about 20 pnt below tangible book. a lot of bad news is in this name already. they're acknowledging the operating loss that's coming and we're just pointing out very simply that the company has put out m&a as a strategic option for itself. and that could lead to a sort of valuation for the summer.
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>> how two-wedged is it that they have over two billion in cash? it cushions investors from more difficulty, but on the other, it might stave off them doing a deal. >> i don't think that's the case vmt i would argue that it's quite encouraging that they have $2.1 billion in cash. it's still growing. and they're taking extraordinary efforts to shake up management. so i would say the company has taken measures to at least buy itself some time. >> back in december, reuters reported that the industry minister called them a canadian jewel. >> i'm not really certain about their work with the government. i'm certain that canada would love to keep rimm in its present
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form. i don't think that's really on the table. i think research in motion is going to have to find some strategic partners or it's going to go the way of nokia. i think while they still have inherent value in the company, i think it is important that they pursue strategic alternatives. and i think clearly they put that on the table. >> i would assume that the government cares about the employees that are still at rimm and they'd like to see that technology go forward in some viable form. so rather than end up with another nortell situation, i'm sure they would come to some sort of agreement if a worthwhile scenario comes on the table. >> alex, the entire market cap is essentially the value of
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their independence. is that true? >> google was willing to pay 12.5 billion for motorolla's ip. and i would argue research in motion has a pretty good ip of its own. let's not forget they still have 78 million blackberry subscribers. so there is some inherent in this company. there are a lot of other technology companies out there that could use those 78 million subscribers and some of that ip. >> facebook might be interested. we'll leave it there. nice to have you on the show. >> well, apple's ceo tim cook takes the stage last night as the keynote speaker and speaking candidly. so should cook's message convince you to jump into apple share's? we're back in two.
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well, the u.s. dollar is gaining ground. fears over europe continue to push back. who better to answer that than our senior economics reporter. >> david, thanks. economists are beginning to take notice of the strong dollar and the weaker euro. euros falling to a near two-year low. just a year ago, it was a strong 138 against the dollar. a and european recession. the speed in which the currency
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values does give economist pause. this latest fight could be very quickly reversed. he's still thinking about what a stronger dollar could be. it would mean this renaissance that we've had which has benefitted also woumd hurt from those companies that are leveraged overseas. it would help your european exports ease inflation concerns on the european side providing more fluctuation to the fed. one way to think about the investment implications, just get out of the way of currency movements. these are the five biggest currencies. call them homebodies. you can imagine why these companies have no overseas revenues. it's going to be more tied to oil prices.
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now, one reason economists are not tied, they look at the dollar differently just from the exchange rate that you and i look at. joe looks to the broad trade weighted dollar. it is up 7% compared with a year ago. looks like a lot? hold on. it remains low compared to earlier this century. really just a blip when the dollar was quite a bit stronger. a stronger dollar should put downward pressure on inflation to an extent. that would give the fed more scope to act. but they're going to be looking for a broad-based decline before they begin to be concerned about one of the main drivers, david, for fed policy, which would be deflation. we're still a ways away from that. >> i do have an important question. i think we're in danger and i love you dearly. i respect you a huge amount. i think we're in danger of missing the point.
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i sug jaes he is very similar to morgan stanley. and, in fact, it should be very scary that the dollar strengthens across the board in this way. and in sense, many of the usual belts that you just listed may be off. >> i pointed that out in this report, simon. if this is a general pulling back, then that's going to generally change the forecast. the only point being, simon, is that you could have a swing into the dollar and if europe should come around and make some of the right noises, it could swing back. the euro hitting the lowest
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level in about two years. how long can the euro remain under such intense pressure? let's get to the money motion in trade. andy bush, here's the capital trade in chicago. andy, we certainly had a lot of volatility this morning with these head loolines and direct access. and then there's a realization that the ecb and germany would have to have a say in this and people were scrambling a little bit when it comes to the euro u.s. dollar trade. >> that's right. there isn't a quick fix for this. the very, very important decision that has to be made on fiscal integration, that's highly questionable at this point. that's why you see the euro continuing to make new lows and the dollar strengthen.
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i think that's a huge benefit for the country. >> so how, in terms of the euro u.s. dollar trade, what are the other levels that we're looking to test? 121? lower? >> yeah, definitely. i think, you know, like i said last week when i was on, i said just dump it. i think we were on 125.70 then. that's worked out really well. don't try to get too sophisticated or fancy. just pick a level and sell it. the reason why i'm saying that, we're in a very strong down trend. all the good news is maybe holding it stable for a little while and then more sellers come in. when you see a trend come in like that, get on the darn thing and ride it. take your shot. be proven wrong before you miss anymore. >> and why do you think we now have this very strong down trend when we didn't have it before.
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actually, in an emergency market, the situation is different. they're intervening to support their currencies now against the u.s. dollar as it rockets across the board and, of course, the price of oil has come down. so many of the arab states are not as flush with cash. >> it's really a broad base. it's really strong right now. you see the equities and bonds. even the french bonds are ral rallying. we saw that a little bit in the awe trustralia retail sales. one is europe. the other is slowing china. and the third is the fiscal cliff in the united states. you get all three of these going, it's very powerful for risk off. >> all right, andy, good to see you. for more currency trades, be sure to catch money in motion at 5:00 p.m. eastern time.
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>>. >> they shipped it. it's an extra money in motion due to popular demand. >> money in motion. in all seriousness, it's on friday. >> still to come on the program, we'll hear from the former -- we'll talk all about facebook and exactly whether now is a good time to buy. stay with us. almost every day i walk into the office
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walmart, one of the few bright spots on the dow this morning. the vicks, up more than 10%. it's back above 23. and pending home sales down more than 5.5% in april according to the national association of realtors. >> the market certainly waking up to salvation could be stlee weeks away. in the summit to sort them out, five weeks away. meantime, remember that china's backtracked slightly on the idea of a grand stimulus. yesterday, you saw industrials bounce today. they're an energy of big loser. oil just above $88 a barrel. wow, look at that.
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7-1 balanced decline. >> you're in the general vicinity. >> and, as far as we are concerned, nasdaq, 6-1. >> i like that, there you go. apple taking the stage as the keynote speaker last night at the all things digital d-10 conference. so what were the major themes unvailed? well, john fort can tell us. >> good morning, david. tim cook talked first perhaps most importantly about saying that ping, the social network that apple launched, has failed uncharacteristic admission from apple and talked about improving relationships with facebook. not going to buy a content company. not going to make a game console. he also talked about big improvements coming for siri.
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the voice activated assistant for iphone, take a listen. >> there's more than it can do and we have a lot of people working on this. i think you'll be really pleased with some of the things that you'll see over the coming moei months on this. >> that's as close as he'll get to a product announcement coming. now, let's talk about the big themes. this is different from last year in the sense that last year, the tablet movement was hardly getting started. hardly any have gone public as of that point. that's the scaffolding that the next generation of services. here, we have a company using an algorithm to show off. there's a company that uses in-store data to give more insight into how their products are doing.
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those sorts are things are going to determine who succeeds over the next months. >> all right, john, thank you very much. john joining us to discuss tim cook's comments a little further. and collin gillies, has a hold on apple. and, today, the ft, names calling one of the world's top analysts. congratulations on that. did you hear anything last night that made you think apple will regain its leadership? >> well, you know, the issue for apple is not leadership. the issue is maintaining and extending that lead. what we're saying is for the near term, we see shares stalled and there's no major positive
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leap. the ageing iphone 4s and mediocre ipad sales. >> brine, coming up in a couple weeks? >> yes, definitely. the key to the event which will occur here in san francisco, june 1 1th to june 15th will be the first day. that's when the ceo will give his keynote address. that will occur that monday morning. typically, they give some sort of unit update with respect to iphone and ipad. we took our numbers down a little bit on apple. essentially the notion is who wants to buy a current product when they know a new one is around the corner. we raised numbers in the back half of the year.
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i think apple is doing extremely well. >> isn't your call a little bit short sided? we have a dert of new products this quarter. it's a tough quarter for apple. longer term, 12 months down the line, we will have new products and an iphone fa5 and maybe som details. >> those are valid points. we don't have a sell on apple. but in terms of being short sided, you've got some potential declines going on for apple. people are taking their numbers down u no. that's a point of concern out there, right? so if you have iphones that don't smash records, this stock is going to go lower than it does higher. >> so brian, have you still got a 750 price target here?
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do you still think there's 30% up site? >> so why, as we've just heard from collin, why are you a buyer with that sort of expectation? >> well, i think at the end of the day, there is a concern with how the iphones are going to ship going forward. i think every single production from apple becomes more and more important. we estimate in the back half of this year, its first quarter launch could be close to 50 million units. we have a chart in one of our notes that basically looks at this progressive trend that we've seen with every subsequent release of the iphone. the product cycles are getting more and more important for apple. we've got a company that's going to generate $200 billion in annual sales next year. so we think investors do anticipate not a tremendous amount of upside this quarter or, frankly, that in september.
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but the december quarter should be a block buster quarter. >> basically, for a company like apple to maintain scale and margin is going to be very difficult because people are chasing on the one lever they have. if there's a take away from research and motion that you want to have is that the same thing that can happen to all maukers. >> that may be the case. but i think that's probably 3-5 years down the road. i still think that the subsidy is bright. obviously the people in cupertino are pretty bright. i think that, you know, the incremental margins that they make, about 85% on mad flash,
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very important for the iphone margins, are not going to decline any time soon. so i think in the next couple years, apple is looking pretty good. 3-5 years out, it may a different story because i reach what we call the theoretical threshold of penetration. everybody wants to buy an apple product, but not everybody can afford it. i think at that point in time, we will run into law of larger numbers. you've got to sell surrounding all of that news regarding that company today. >> yes, absolutely. i think the real issue is when do you take it off. and, you know, the people who are excited about the advisors that were hired to, you know, advise the company, let me just point out two factors, one is for a strategic buyer, you still have a 52-week high that's around $43. you need some time in order to go, you know, really accept a lower stock price. of course, the company has been labeled a national jewel.
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and for a financial buyer, you're still talking about $10 billion. >> are you saying the canadian government could block a takeover? >> yes. that's certain le language i would indicate. >> we don't know. there's nothing in canadian law. they didn't potash. >> well, they have the option of going down the road, but they have to prove the case to do that. it's not as though they can turn the switch. >> that's actually, in u.s. law, you have to prove the case oftentimes outside the united states, you don't. >> thanks, guys. >> thank you. >> you might have noticed the bottom of your screen with the euro breaking 125. this is a two-year low on the euro. actually, we're below right now. and no coincidence here. we're sitting low on the s&p 500
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as well. so as the euro is sitting session, so is the u.s. >> this is what's carry. it's also getting hammered. >> absolutely. >> previously scheduled speech, but the press rules may have been changed. now, being off the record, is there any expectation that he could go somewhere unexpected? >> last night, he was telling the rest of europe that they need to have some brave decisions. the market is waking up to the idea that the solutions are further down. but i am not sure. that is what happened. >> paypal, for his take on the facebook fall out. that's next. male announcer ] citi turns 200 this year.
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face book looking more than 20%. facebook has lost $25 billion in market cap. but can the social media giant get its mojo back? the former capital and paypal ceo. you have said whether it's valued at 90 or $70 billion, it's still a valuable company. i have to ask you first, are you an investor in facebook at all? >> no. >> is it attractive to you at this point? >> i think facebook is a great company. was a great dpaen. is a great company. will be a great company. it will regain its footing. it will do fine. you'll look back to the google ipo, we'll have the same thing happen there. does that mean that individual investors should invest specifically in facebook? i don't think so. i mean, i think the really important thing to think about, particularly, if you are a silicon valley participant yourself, is what your overall asset allocation is and howdy
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verse fied you are with not only stocks, but sectors. >> in your view, does what happened to facebook change the course of conversation for tech start ups across the valley in terms of how they go public, when they go public and who handles it? >> no, i don't think so because it's such a special case. it takes a little bit of bloom off the rose. but there is plenty of great traction in the silicon valley right now in terms of not only businesses, but revenues and profits. >> then why would you not recommend -- if you believe in the company's future, why would you not want to participate? >> my personal perspective is what you really want to do is diversify across multiple names. and as a retail investor who's looking after your long term financial wealth, that's the perspective i take. >> so are there too many social networking-type sites that people are invested in? do you need to diversify away from that? is that what you're saying?
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the bulk of the issue that is come to market are all in this same area. >> let me take a slightly different area which is how about somebody valley right now who may be attracted to this kind of stock, but works in the sector and works in silicon valley, that person is highly leveraged and exposed to this type. >> if you were on the east coast and you weren't, you work for a dow member and you weren't already exposed but want to get exposed to tech, would you buy facebook? >> yes, as part of the exposure to tech, absolutely. >> you say in general tech is more likely to subside than grow in the near term. i'm not sure what you mean by that. >> sure. essentially because the tech sector has outperformed the s&p since they crashed and there's got to be tailing off of that, but no way are we in the position that we were in in the bubble that was tech representing 34% of the total market cap at that point. it represents less than 20%
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today and 4% of that is apple. >> i assume you say this is one of the best things the country has going. >> there's more opportunity in the tech sector than there has ever been with new channels, new devices and new opportunities to build terrific products. >> you think facebook can be challenged, as somebody who once ran paypal with a great growth trajectory in its leader of payment services, do you think facebook can ever be challenged? >> absolutely. but it won't be challenged by somebody doing the same thing facebook is doing. and that has only been doing. or challenged by one. they will be challenged by facebook coming up and doing it differently. >> when you spoke about the future, you mentioned hardware, you mentioned things and devices. what we floated here are ecommerce sites and social networking sites, very different from where again you have chosen to focus in the conversation. >> well, it is different than what represents the majority of tech today. if you look at tech, the big names are almost value stocks between microsoft and cisco and
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all the rest. but there's huge opportunity both on the hardware side and also in software. >> paypal's name has made headlines a lot because of its relationship in the past with scott thompson, right, and the scandal he had over at yahoo!. got any lessons or cautionary tales from what happened there? what do you think what happened will there? >> i don't know, but the last thing yahoo! needs is a search for a ceo or temporary ceo. and i wish them very well, but it's -- they have a tremendous asset. they have a huge asset in the loyalty that the eyeballs have. and it takes constancy to turn that around. >> is what happened regarding thompson indicative of the person you know to be scott thompson? >> no, it's not. i know scott thompson only a little bit, but he's always been an outstanding fella.
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>> would your you like that job, bill? >> no, thanks, i'm busy. >> bill, thank you for stopping by, we appreciate it. bill harris. still ahead, the ceo of cowen & company is joining to us on the economy and more. but first, we have a big hour coming up in a few minutes with gary, right? yes, you guys were talking about technology. we are here at the 40th annual conference with portfolio analysts come every month to try to figure out how to make money. we'll be joined by peter cowen with a lot to say about wall street, the industry, we'll do that at the top of the hour. i'm consolidating my assets. i'm not paying hidden fees or high commissions. i'm making the most of my money. and seven-dollar trades are just the start. i'm with scottrade. i'm with scottrade. i'm with scottrade. and i'm loving every minute of it.
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we are now a half hour into trade and it is a rough morning for the markets. dow into the negative territory. oil has fallen below $80 a barrel and the dollar is spiking across the board.
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scott ren is with wells fargo advisers. jerry castalini is here as well. the dow is down 6% for the month. what should people do? >> i think people should hold tight. you know, we are all doing the same thing, which is outthinking the european problems. we are not europeans. they have a lot more at stake than we do, but we seem to believe everything about our market relies on that. if you take -- if you peel back the onion layers, the u.s. economy is doing very, very well. the stocks are probably 20% to 35% undervalued. x this european issue. any sign we see -- >> i'm sorry, jerry, what does that mean, x the european issue, meaning that europe certainly goes away? >> yeah. >> but that's not going to happen. >> i don't mean to pick on you, jerry, but ex the markets, you have to put these into the
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market fashion factors, don't you? >> yes. i'm just saying they are very discounted in this market. you have real concerns here. obviously, a really bad outcome would have another downside risk. the upside is two to three times what the downside risk is. if you focus on that, you are looking for good companies here and letting the markets come in to. >> the market is now at 1.46%. what does that say to you? >> simon, to me, clearly there's a rough rush to safety here. and it shows we are in the slow growth mode for quite a while, which i think will be the case. the last time i was on this segment of the show, i talked to carl and said if we are in the ten-year, that's not a good thing. we are lower than that. we are there because bad things are happening around the world.
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>> jerry, a lot of people drawing charts that show the correlation between currencies and stocks hinting that we are due for some down day if stocks are going to catch up in the near term. i assume you are not ruling that out. >> oh, no, you can't rule it out. carl, this market is going tot end up bottoming where it wants to bottom. that could be through the 12.80 mark on the s&p. in spite of the issues overseas, i just want to remind investors, the long-term people out there, that the economy is the ultimate driver and the economy is doing very, very well. and i hate to act like i know better or most people want to say they know better, but the reality is our economy is doing fine in the absence of a greek bankruptcy, we should do just fine here. >> those long-term people out there, scott, those long-term people out there have memories of last summer and the summer
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before that and say, hey, it looks just like it did then and those were not very good periods. >> they do. and they are worried about it. the bread and butter of wells fargo advisers are retail advisers. they are afraid of the market. and the toughest part of my job right now is to -- we've been telling our clients we see a pullback into the 12.80, 1280 to 1300 level, they look good. the technicals and fundamentals are lining up. get your portfolio ready for the bull market. we want our clients in here taking advantage of this pullback. >> thank you for joining us, scott ren from wells fargo advisers. and jerry castillini, thank you. when we think of gaming stocks, we think of zenga. that stock is up 42% this year.
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we'll get this guy's take on where his business is going tonight at 5:00. david, i still love that suit. we'll see you tomorrow. >> you can't have it. it would not fit you anyway, but we'll see what i can do for you. in the meantime, here's what you missed earlier today. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> the more you begin to perform again and you get the confidence of people, then the stock will come back. but certainly there's going to be a penalty to pay. you can see that today in the market price. >> have these institutions in 2008, some of them, been outside of the safety they would have failed. and i would have been perfectly satisfied for that would it not be for the impact it has on the larger economy. >> i don't know what the itv looks like, but i want it. i have research firms telling me the contrast. it is too juscy not to mention. i think it is trading on the
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revuls of stocks. i think it is trading on the idea that this has become ground zero of the nuclear war of stocks by the public. get ready for the open. we have a sharp day down here at the new york stock exchange. a lot of things didn't go the way people thought, but the company is still performing. users continue to grow. it has billions of dollars in revenue. it is highly profitable. people don't realize it is less than 4,000 employees serving a billion people. there's some inherent ipo value in this company. you are talking about facebook and there's rumblings of them interested in a phone. i'm not sawing that's a plausible scenario, but there are a lot of technology companies out there that could use some of the ip. good morning. welcome to the third hour of "squawk on the street." the dow is basically erasing and then some. the gains down 156, more than the 125 gain yesterday. nasdaq also down 40 and the s&p 500 down 18.
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retailers leading the fall on the s&p. sears the top decliner with kohl's, jcpenney and target in the red. monsanto is bucking the trend. the company boosted the outlook for the full year and the quarter thanks to strong seed and herbicide sales. our road map for today, the hits keep coming for research in motion, the stock in a steep slide as the company reviews its options to reshape or possibly sell itself. we'll find out if there's value left in that name. plus, the former ceo of lehman brothers and the current ceo, peter cohen, is joining us to talk about wall street and investing. the ceo of cowen & company is here, jeffrey solomon. and the post 9 investor club is back. we'll tell you which stocks to buy and sell and which ones are truly best for your portfolio. that's coming up in the next hour. first, shares of rim continue to drop after falling
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more than 10% in after-hours trading yesterday. the company reported a surprise operating los for the first quarter. it hired rbc capital to review its numbers. james mormon is equity analyst at iq, and on the phone, scott sutherland, managing director with web bush securities. gentlemen, good to talk to both of you. >> good morning. >> scott, let me start with you, around the $10 levels, that reflects the full value of all their patents. downside from here, is it too risky to shoort it at these levels? >> i think at these levels, if you look at rim and their strategy, we think there could be more downside with the stockment and we also remind investors part of the patents are the ones they acquired from nortel are shared, so it could be harder to monotize those patents than their own. there's some value, but we think
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it is more than the $78 level to find a floor if things continue in this direction. >> james, the conversation today, assuming jpmorgan, not everybody gets to the at the table, is it about selling to somebody else? is it about breaking it up into piecemeal pieces? is it about just shrinking yourself into a much smaller player? >> right. i think of the conversation centering more around strategically licensing or other parts of the blackberry flat platform. i don't see them looking to sell the company. i think they are trying to strength it, that's why they are doing the reorganization and cutting costs. i think they really still believe they can rebuild the brand through blackberry 10. if they were to sell assets or the company, i wouldn't be expecting that until next year, well after they launch bb10. it will center more around licensing, but i note they also tried this in the past with licensing blackberry connect to
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a lot of the major handset vendors. i'm not overly optimistic with the alternative. >> why is there so much mystery surrounding the 10? we all know it is coming, we all know it is likely to be the life raft if it has a liferaft, we all just don't know about the timing. >> the company said by the year end. with that, you wonder could they get caught up at all, some of the chip shortages are going to qualcomm. they have already delayed it one. from what we saw at the developer day of the world conference, it wasn't overly optimistic in terms of where they are so far with the development of a hardware device and especially where the software is at this time. >> compared to apple, the blackberry 10 is not so secret like apple keeps very secretive. we know the playbook and the
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access to blackberry 10 and building apps for it. i think it will be more up in arms than the apple approach. >> scott, your mutual price target goes to 9.50. i assume you're not ruling out, assuming they announce a cash measure or strategic shift or talk of a takeout, you could be looking at the spike of what, scott? >> i think as a strategic shift would be a licensing agreement, but i agree it has gone down the road and can be very difficult to monotize it through that approach. we thought they should have done that a year or two ago. so it could be a couple dollars but we think that would be very short lived at this point in time. >> all right. gentlemen, certainly going to keep a lot of our attention, even if fewer and fewer people are using the blackberries. thank you, james mormon, scott sutherland talking rim today.
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zynga and facebook are i didn't gratly intertwined, and as the facebook stock falls, zynga goes with it. julia boorstin is live with more on what the companies are doing in the wake of the disappointing facebook ipo. good morning, julia. >> reporter: good morning, carl. everyone here is talking about facebook's ipo and zynga realized it needed to diversify away from facebook. zynga is down 26% since facebook started trading and all eyes are on the ceo mark pinkis when he takes the stage in an hour. the social gaming company said in the latest quarterly report that it generates, a, quote, all of our revenue and players through the facebook platform. but the ceo says it is making a push to diversify. in march launching a gaming platform aside from facebook and is pushing into apps.
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spotify says the pressure on facebook in the wake of its ipo is a good thing. that means investing more to benefit flat form partners like spotify. i also spoke to the ceo of open sky, which encourages loggers to use facebook's connect and the timeline. he says the ipo is in the disappointment of the public eye. arecent partner jeff jordan on the boards of pinterest says he encourages his companies to grow through facebook and independently. i asked him if facebook's ipo changes his perspective. >> the ipo is a financial event. what has become emerging over the years is facebook as a redistribution machine. it can make companies. so working with them in a constructive way is important for all start-ups.
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>> reporter: i'll have the latest on mark's comments here and you can find more of our coverage, including our entire interview with jeff jordan, on our blog. >> julia thank you so much from california. we'll go to the santelli exchange now with rick santelli. >> good morning, carl. this is a big day. historic low rates. as i look at the board, here we sit at -- 164, that's a new one. we are under 130 for a boon. with these historic low rates, is it really helping individual debt? in february of 2009, i said if you are upside down, you can't afford the house you're in, does it matter if you get your rate lowered from 5%, to 4, 3, 2 or
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1. you can give the people negative interest rates. if you have credit issues or collateral, the low interest rates aren't going to do you a world of good. not to mention the fact that most people who need to refinance can't for the reasons i just mentioned. as for government debt, let me think this one through. we constantly see people agonizing over whether they will have qe-3. why would we need the fed to ma anyone manipulate rates lower than they already are? i can't figure that out. and you want sponsorship, not a safety trade. listen, i thought that a lot of the programs at the federal reserve did were bad for the dollar, and they were. but obviously europe sinking into the ocean is worse for the euro and it helps the dollar. last, but not least, how many times have you heard with taxes, let's go back to clinton-era taxes. we created 20-million-something
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jobs. in 1994 the unemployment rate was 5.6%. fed funds rate was 5.5%. there's your answer! just put the rate back up to 5.5% and everything will be great. you see how dumb that logic is? back to you. >> the economy looks a lot different today than back in '94, true. >> bingo! >> thank you, rick. when we come back, the wall street giant, the ceo of lehman brothers, peter cohen is with us live. we'll talk about the state of the markets, investing, wall street and a lot more. the key interview when we come back from this break. tt financial consultation ttd# 1-800-345-2550 when companies try to sell you something off their menu ttd# 1-800-345-2550 instead of trying to understand what you really need. ttd# 1-800-345-2550 ttd# 1-800-345-2550 at charles schwab, we provide ttd# 1-800-345-2550 a full range of financial products, ttd# 1-800-345-2550 even if they're not ours. ttd# 1-800-345-2550 and we listen before making our recommendations, ttd# 1-800-345-2550 so we can offer practical ideas that make sense for you. ttd# 1-800-345-2550 ttd# 1-800-345-2550 so talk to chuck, and see how we can help you, not sell you.
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welcome back to "squawk on the street." here's your market flash today. look at crude oil peers piercing the $90 mark. sitting at seven-month lows, and none of the oil service majors have sustained gains in today's trade. exxon mobile is down 1.2%. >> it's amazing what happened to that sector in a short amount of time. thank you, kayla. from markets to the regulatory environment, the next guest is a wall street legend, gary cominski is joining us with peter cohen from new york city. hey, gary. >> thank you. good morning. we are having some great conversation here off camera, so let's bring it on camera. peter, first tell us how you see
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the world right now. you have been through many market cycles, give us the big picture outlook in ferms terms of how you see the world. >> i see the world in the most difficult place since i have been active in the business world. and i don't see an easy out to the problems that we face, starting with europe coming to the united states, our extreme overleverage position we have just being masked by the focus on europe. china is slowing down. japan has its issues. the whole world is in a vicarious position and it has me worried. >> when you look at europe and it makes the headlines we have day, and we've got a number of companies here that try to focus and grow their businesses, do you think it is possible for business leaders to run a business and not focus on europe and what's happening there? >> no, it's impossible. europe is end gral integral to
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what happens in asia, what happens in this country, the cross-border trade between the two is very, very large. european union taken as a economy is bigger than the u.s. and it is just too important to world trade. >> i think carl wants to jump in there. carl? >> peter, great to have you on the show. we love having you. i guess zeroing in on europe for a bit, have you started to compute the most likely scenario, whether it is greece or greece and spain, whether it is a euro that survives some exits, whether it is a euro that goes away completely, does any of that matter? >> well, i think it matters immensely what happens. there are any number of plausible scenarios. the one that may end up playing out is that the whole union shrinks back to the original seven or six countries that had this sort of trade affinity, but
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it expanded way beyond the practicality of it. and it doesn't work. it can't work. we are active investors in europe, in germany and italy and spain we have assets, and these are different sociopolitical countries. that they are all different. there's no way to get a common union out of it, in my opinion, so i think they have to come up with some solution, which reverses what's happened here. >> peter, let's talk about something that may or may not also work, which is the idea of the financial supermarkets, the new investment banks and the new regulatory environment. as you and i chatted before coming on air, shares were hardened at the time. the biggest retail industry you have seen, you have seen the build-up of big institutions in what we have today, how do you look at the retail distribution world and what is it that you see out there that is going to survive, who is going to have
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success? >> well, i think, gary, that size is an impairment to management. i think the big organizations, quite frankly, are just not really manageable. and i think we would be better served to be back in the '70s-type environment where we had a fairly significant number of high-quality firms serving different constituencies in the market, whether institutional or retail. much higher quality research back then. and the retail investor was much better served than he is today from the supermarkets. >> the retail investor has felt, not just for the last couple of weeks, but for the last decade that they have been at the disadvantage of wall street. do you think that's a feeling for the retail investor that makes sense? >> honestly, i do. i think the retail investor has take an backseat to the institutional world. you know, i understand why it happens that way, but firms today, these big supermarkets aren't geared to service the
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retail investor. cowen when it has a retail competitor was good at it. manhattan first in its day. we need more of the smallish boutique-type firms reemerging and providing a high service. >> it is getting back to the financial services, at least for the purpose of capital markets, makes a lot of sense. >> if we don't, we won't have capital formation. >> interesting. carl? >> just one more from me. peter, all week people cannot stop talking about facebook. and i'm wondering if you can talk about your involvement in the public offering. can you separate the technical glitch from the pricing? what lessons have you learned as a result of what happened two fridays ago? >> in my opinion, the technical glitch and the pricing have nothing to do with it each. the technical problem is a
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technical problem. i think that, frankly, it was an overreach. i don't think that it should have been upsized. and i think that we don't really know all the facts about it, so it's kind of not fair for me to talk about it. but i've never in 43 years seen anything like this in my career. >> in your career you never saw -- when you discuss your career, you are talking about the -- forget, we don't want to talk about facebook specifically, but the way a transaction is put together that sellers want to get the highest prices. buyers want an opportune price. you think this is the system failing? >> i think it broke down. the system has to insist doing right by everybody in this case, and it broke down. >> i was a lawyer in the different part of my life, the cohen of today is trying to get
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back to the cowen of old. what can cowen offer today that they can't get in the older institutions? >> we are disciplined in trying to service a limited number of vertical silos. because we think we can only be good at four or five things. that's from the banking side and the financing side and the research side. our investment management division, we also have this same approach. silos, a handful of verticals to be good at and not trying to be all things to all people. that's when the quality breaks down. >> thank you very much joining us, peter. carl, refreshing and honest conversation about the challenges facing the industry and facing the world as well. >> great conversation. our thanks to peter cohen. see you in a few minutes. when we come back, the european close moves the markets every day. look at yesterday's session and the turning point we saw at
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11:30 eastern time. about seven minutes and change until that happens again. we are back after this break. a passionate belief and the foundation on which merrill lynch has been built. today, our financial advisors lead from a new position of strength. together with bank of america,
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yesterday we had a125-point gain to the dow, but today that's all gone with the dow down 137. the nasdaq is down 33 and the s&p is down 16. europe is about to close. when we come back in 3:45, that is, don't go away. is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything. so every piece of equipment knows where it is, how it's doing or where it goes next. ♪ this is the bell on the cat. [ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ in your fight against bugs. ortho home defense max.
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a lot of headlines today and it is hard to know which one toss take seriously and which ones to ignore. once again, we have incredible numbers coming out of the european credit market. >> yeah, i guess if you think there are two reasons why you wouldn't push the market down or sell it short, one would be if you have a breakout in activity for the ecb or breakout on coordination between all the countries and arguably you have been pushed back on both fronts over the last 24 hours. let me show you over the course of the session, as carl mentioned the news, we have the civil servants in europe saying, hey, let's have some sort of bank coordination. let's have a bank union. and also you have the ecb suggesting maybe we weren't rejecting spain's advances on recapitalizing banking as strongly as in the press. and we got pushed higher on
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both. but ultimately the market has sent europe substantially lower during the course of the session, as you can see. let's just have a look around europe. that's really the question that you have to ask, can the con they general be stopped in spain. those are the questions people are asking. that's the sea of red today. no question about that. if i take you through where we are on the bond market, of course, if you have been watching all day, you'll notice right now it is worth repeating. it is the thought that you have had substantial moves higher on the spanish and italian bond markets today as people have sold out for fear of where we might go. so the italian ten your is above 6% for the first time since january. that's not as high as we were coming out of last year for all the reasons we discussed. nonetheless, it is a concern. the eye of the storm is clearly spain, no doubt about that.
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and there you can see the yield now on the ten-year is at 6.6%. so you continue to have a lot of stress coming through that market and the cost of insuring spain against default is rising. for that simple question, where is spain going to get the money to recapitalize the bank and the other banks who need extra cash and how much cash that will be when they access the bond markets. and there's a lot of concern about that. the banks are down across europe, as you can see, but that's not where the bulk of the selling is happening. if i was really honest, it's the cyclical stocks we were mentioning yesterday that fell today. because into the mix on both sides of the atlantic you have this move back from the idea that the chinese were about to massively produce their company. this is the likes of volkswagen and the big global miners.
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they are down after yesterday. they bounced because they thought china would come through. and we sold that here or saw that year yesterday, basic resources didn't do well and they are falling today. >> the false rally as kramer called it a few hours ago. thank you, simon. now to rick santelli back in chicago with a guest. hey, rick. >> well, thank you, carl. my guest today, the big talk on the floor yesterday was something on the zero hedge website. they talked about line 5.2 on the balance sheet. it was about $24.2 billion lower. that's that line item and what are we talking about? >> first of all, we are getting to definitions here. this is the three-year refinance program set up by the ecb that had a minimum holding period of one year. the loans went out to the various governments in the eu that can refinance their banks, whichever way they want to do
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it. but they are supposed to hold them for a year. what's going on with the line item is it dropped. >> so it is the amount of ltro out there. >> the outstanding balance of the loans. it has dropped first on may 11th and then 25th. >> those are rt wrote reporting periods, aren't they? >> yes, they are. those are free payments that have been made to the ecb. if these are one-year loans, we are not talking three months into this. either somebody lost their collateral or somebody whatted to repay it and they had to put the cash back. >> this prepayment, unlike prepaying more mortgage balance, this is not a good prepayment. >> not at all. the prepayment here, it's because somebody has scrambled to come up with cash to put the loan back, that they don't have collateral back at the ecb. >> whatever the covenants and rules were in regard to many, in qualifying and being involved in the rto process, somebody
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doesn't now make that witness test, maybe their collateral is no longer accepted, but the reason this is so important, everybody was passing it around. it seems to coordinate and correlate with some of the deterioration that continues to go on with balance sheets in europe. can you exbound upon that a bit? >> just with the spanish banks n particular. a footprint in florida with an interesting twist yesterday out of the ft. the funding that they lack, the massive housing build-up and bubble they went through, their leverage is so much higher than the united states, the worst here in the crisis, their strength was something like 37-1. >> wow, 70s and 80s. we are talking bell bottoms. >> when it collapses it comes in in a rush. the market is so horrible. i shouldn't say horrible, but it is overbilled and is correcting
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itself. there's no way the banks -- >> we are out of time. spain is such a completely different animal than greece, for example. there's so many low-hanging reforms to help greece very quickly. spain with the epicenter of much of their debt issues on the balance sheet of banks related to housing. that's a long haul. carl, back to you. >> thank you, rick santelli in chicago. bob is joining me here with the dow down almost 150. it's not what a lot of technicians say we have yet to say. >> i'm so happy i came in on this. the interesting thing is the volume, while heavier than it has been in the last few days, is not on the heavy side. that's important because we are getting a buyer strike of sorts. these are not people heading for the masses, but there's just nobody interested in buying it. you can go broke on low volume. look at the split today. look at the defensive groups down here. so look, down here, just modest
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declines, but look at the big names. energy, industrials and financials, is that a real number down 8% in energy stocks in that's significant, those are interesting numbers here. a lot of people are writing in telling me, bob, look at the transports and the industrials. they are splitting off. and the transports are down almost 2%. the industrials were down at one point 0.9%. this is a bad sign. and it is not a good sign in general, but it has not been going on all throughout the month. take a look at the month, the dow still industrials are down more than the dow transports. that doesn't really happen very often when you see this kind of decline. don't take too much about the industrials versus the transports. overall on the month, there's nothing unusual going on. 3% drops included in natural gas. boy, it is ugly in the energy complex today. it doesn't matter what you are looking at. the european stocks, the equipment companies like tidewater, the drilling companies like transocean. right across the board, anything
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looking for natural gas, anything helping to look for oil in natural gas are down 4%, 5% or 6%. a lot of big economic numbers are out tomorrow, carl. we'll get gdp, second quarter the revision, 1.9%. a lot of people are expecting below 2% numbers. and we'll get payrolls on friday. i just want to talk to you about the volume here because a lot of people keep asking me about the volume. so far, this is according to raymond james, for the second quarter, we are 5% below the same period last year for the second quarter. the overall volumes for the stock market are to the downside. i want to put this up quickly, the volumes of where it is going, dark pools are one-third of all of the volume that's being reported out there. no other words, one out of every three trades occur off of exchanges in the dark pool today. that's rather remarkable. that's a much smaller number five years earlier. >> i wonder how much smaller. >> i can get that for you. it is less than half than it was five years ago.
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>> thank you so much, bob. great stuff. the ceo and director of cowen and company is joining us live with his views on the tech sector, what he sees in the ipo pipeline. but first, a look at the winning and losing stocks from europe's trading day. ncer ]e a what if you had thermal night-vision goggles,
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coming up on "the half-time show." with the u.s. ten-year at near-record lows, we'll tell you
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the best place of no return. plus, we are getting all the possibilities of what could come next for the troubled blackberry maker. when will apple's ipad overtake the mac sales? we are getting the predictions, and it is a lot sooner than you think. and we just snagged sales of mark benny from the conference. >> i just saw you tweet that. that's a great get. can't wait to see it in a few minutes. i want to get to john harwood at the white house with breaking news on trade legislation. john? >> reporter: carl, we have a rare instance of bipartisan agreement and accomplishment in washington in the year 2012. we are awaiting president obama's signature on the bill reauthorizing and funding the export/import bank which provides $32 billion a year in loans to fuel exports. about 1/3 of that goes to the boeing company for heavy aircraft. and this was caught up in some of the crossfire between the tea
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party, which thought this was unjustified corporate welfare that the taxpayers couldn't afford. and more traditional republicans and democrats who thought this was vital for keeping manufacturing jobs going. and we have heavy goods including boeing's airplanes. >> the stocks are down a margin here. thank you very much. john harwood at the white house today. meantime, with facebook and apple making headlines, here's what's to expect for the future of tech ipos and gary cominski is here from the conference in new york. hey, gary. >> reporter: thanks, again. we are joined by jeff solomon running the investment bank. jeff, we ended the conversation with peter talking about the world and the investment banking and financial supermarkets, the big firms, the smaller firms. give me -- let's expand on that. you've been in a big firm, you
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are now running a small firm. why is it that the big firms won't be able to succeed in this new environment? >> well, i think it is more how we can succeed. so i think the banks have great brand names and it is hard to compete against those guys because they deliver a lot of product through the pipeline, but what they are missing is the ability to focus on client needs and follow through. from our standpoint at cowen, we spend a limited amount of time on how to move the needle for them. that's on the investment banking side and the trading side. we have to really figure out how to move the needle on a consistent basis. >> your institutional clients get the same research from cowen as the larger firms. we were just chatting off camera in terms of the quality of research and what's happened. why is it that the big firms continue to supply research product if, in fact ashs lot of the research product is not necessarily long-term value added? >> well, i think there are two
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strategies. if you are a bold firm, you want as many votes in the institutions as you can get across as many sectors as you can. that's a bulk gain. you got a b in every sector. a firm like cowen, peter said it beautifully, we focus on the things we are good at. our research calls have to be value added and differentiated. we can't do elevator research, like this went up, this went down, here's what happened on the earnings calls. it a needs to be active research. we have a lot of go-to analysts for the buy side, and that's how we are going to leverage our franchise. >> i want to talk about the ipo. you run the investment bank. explain to the viewers what is a successful ipo? what are the successful characteristics of a successful ipo in a transaction? >> as an underwriter, you are in between the seller of the stock, which is the issuer, and the
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buyer of the stock, the institutions. i view it as a matchmaker or marriage counselor. you need to be able to create a great bond between the new owners of stock and the old owners of stock and the management team. and we counseled a lot of ceos and the board of directors as we thought about going public. the ipo is a step on the way to value creation. it's not the value creation of that in and of itself. so we talk a lot about the basics. let's get out and tell your story before there's the pressure of a deal. let's tell the story during the deal process. but most importantly, let's get back out on the road after the deal process, first to say thank you to the people who gave you money, second, to really build that credibility with your institutional buyer base. you should have a couple quarters where you have a good deal of visibility so that you can deliver on your promises. >> once that bond is broken, and i don't want to talk about a specific transaction, but once that blonde is broken and you
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don't have that immediate come buy ya of seller and buyer, is it possible for the institutional world to reembrace an issue after that is broken? >> it is. one of the things we have looked at, in particular, is looking at a lot of companies out there that have been cast aside by the larger brethren who don't feel like they can make money there anymore. we have been focusing companies that are underserved, uncovered with ree merging technologies to get behind because we see a trajectory. we can actually do that. we do that a lot at cowen focusing on things on people's radar screens to get them back on the radar screen. >> thank you very much, jeff. a call back to you, carl. i suspect we have a lot of great insider information in terms of what's happening on the investment banking and in the minds of many viewers today. >> thank you very much, gary. when we come back, it's the
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return of the post-nine investor club. the investors will tell you the smart buys. we'll see if we answer your questions right after this break. the cnbc real-time exchange market snapshot is sponsored by interactive brokers. interactive brokers, the professional gateway to the world's markets. with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade. ♪
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time for the post-9 investor club. we want you to tweet us the stocks you want to know more about. we are going to answer those tweets with a customized analysis because we are here for you, the viewer. stephanie link, director of vp at the street, a cnbc contributor and kramer's right-hand woman and portfolio manager at actions plus, great to have you, stephanie. >> thanks for having me. >> great names that don't get enough attention, adulent looks impressive after the recent earnings beat. time to buy?
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>> as the high-quality test and measurement company with a very diversified end market in communications and technology, in life sciences. they also have 35% of the exposure in the long-term market. a good management team. and in the last quarter conference called the book to bill was the best in five quarters. i think numbers are conservative. i like the setup into the rest of the year. very good cost controls. and really focused on the right r&d spend. that's key in my mind. and it trades at a discount to the historical end and to the group. >> another tweet, franklin resources, when is it hitting $200? >> i don't think it will hit $200 in the near term. as the high-quality asset manager. they have a very goody verse fied portfolio. exweties international, the u.s., they have done a good job at focusing on organic growth.
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that said, you need a strong equity on fixed marketsment and it is hard to get the growth in fee income. i like it, but i think it can wait in terms of buying it. >> just a victim if you want to call it that, a weak macro environment. >> that's exactly right. again, i think if you feel like the market is going higher, then own finance managers, but i think it may pull back a bit. >> windstream seems to be doing well lately, except debt. >> that's sticky business, but it is good. the problem is because of the acquisitions they disappointed in the quarter and guided lower. it is a show-me stock. if i'm looking at defensive names, i'm thinking at&t,
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verizon, they are overowned but i can sleep better with those. >> that was a tough day the other day. finally, may i have your opinion on nitrogen? >> the ag space has take an hit recently because we are seeing record u.s. corn crops, but i would just say that focus on some of the more liquid names, cf industries is one. i also think that after monsanto's news today, dupont is down. and i think that company is really doing wonderful things. so i think there are more liquid places in this environment. you want best in breed on liquidity. >> monsanto got people's attention today. >> dupont has a competitive seed and they are doing well. >> stephanie, great stuff. thank you so much. don't forget to keep the tweets coming. research in motion hiring big financial firms for advice on the company's strategy going forward, but we are trying to save rim money today.
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so what advice would you give to rim? tweet us @cnbcsquawkst. we'll get your answers right after this break. you like golf, don't you? well, how would you like to win a golf ball signed by the entire "squawk on the street" gang. all you have to do is nail the number. if you can guess this friday's non-farm jobs number, it's all yours. tweet us@cnbcsquawkst. and you have to be 18 years of age, too. sorry, kids. for all the official rules and details, go to cnbc.com. you have until 8:28 this friday morning. good luck. ♪
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strategic options have to pay a lot of money for the advice, so we are asking you, what free advice would you give to research in motion? we got a bunch of responses. mark writes, my free advice would be to invest all free capital in apple's stock.
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the best roi you can expect at this point. fred writes, rim should not pull a yahoo! again. when microsoft or am don or facebook calls, don't hang up. a lot of you have a common theme running, that is selling in some form to apple. rick santelli is watching interest rates and the euro. another day of dramatic action. >> hey, you like 007? >> yes. >> okay. well, on a one-year note in germany and a two-year shot, .007, shaken and totally stirred me up when i saw it. in terms of the euro currency itself, we sit above 1.24. the last six weeks we have been moving lower, but if you would have told somebody a year ago about europe, they would have said, parody. so it is still too high in my book. >> absolutely. gary, meantime, you are looking
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at morgan stanley and facebook and putting into context what we heard out of the cattle conference today. gary? >> amazing stuff here. so informative. let me reiterate something we talked about a week ago. time for morgan stanley to let the investors know what their position was in terms of the green shoe with facebook. they should disclose at this point what they have done, have they made money. everyone wants to know, it is time they come clean on this. >> listening to peter cohen earlier in the hour, gary, and listening for something positive, he said the world was over leveraged, the environment is one of the toughest he's seen. banks are too big. the ipo for facebook was mismanaged. i don't know, maybe you heard something i did not. >> no, i think -- i have known peter for quite some time. peter was being realistic and i think those that try to put a positive spin on a lot of the things that you just mentioned, carl, are just doing that, trying to put a positive spin. so i think it was in your face, it was harsh, it was

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